European business stakeholder confidence in Vietnam’s investment environment continued to rise at the start of 2022, according to the latest Business Climate Index (BCI) from the European Chamber of Commerce in Vietnam (EuroCham).

Members of EuroCham attend a gathering event last April in Ho Chi Minh City. Photo: EuroCham

For the first quarter of 2022, the BCI climbed to 73, once again reaching its highest point after the fourth wave of the pandemic. This is a 12-point increase compared to the fourth quarter of 2021, in addition to nearly 58 points of growth compared to the third quarter, with business leaders now more upbeat after the relaxation of Vietnam’s pandemic-related restrictions and the continued acceleration of its economic development. 

The BCI is likely to sustain this upward trend next quarter, with a more optimistic business outlook from business leaders anticipated.

European business leaders showed increasingly improving attitudes towards the prospective growth of Vietnam’s economy. More than two-thirds of respondents believed the Vietnamese economy is more likely to stabilize and improve in the second quarter of 2022 (Q2), compared to 58% who held this view in the fourth quarter of 2021 (Q4). This far exceeds the 5% of respondents who anticipate economic deterioration for the next quarter.

Source: BCI Quarter 1, 2022

European business stakeholders also indicated ambitious second-quarter projections for their companies, especially when compared to projections made for the first quarter. Nearly 66% of respondents are expecting increased revenue for the second quarter of the year, compared to 52% three months earlier. Likewise, more than 46% of respondents are forecasting headcount increases for the next quarter.

EuroCham Chairman Alain Cany said once again, that European business leaders have wholeheartedly endorsed Vietnam’s post-pandemic new normal investment environment. There has been a lot of cause for optimism following the relaxation of Vietnam’s pandemic restrictions and the results of this survey reflect this. 

The country’s economic recovery is rapidly moving forward, as it remained one of the best performing and most exciting investment destinations in the world. Foreign-direct investment (FDI) disbursed in Q1 of 2022 reached its highest level over the past five years. Likewise, Vietnam’s Q1 2022 GDP growth rising over 5% is extremely encouraging. 

He added: “Last quarter, EuroCham requested the government to go further and faster in its reopening to tourism. This has since been addressed and we are very much appreciative. Our friends, family members, and work colleagues outside of Vietnam can now easily enter the country under pre-pandemic conditions. This has been good news for all of us.”

Green investment in Vietnam

With these recent developments and with Vietnam’s re-emergence as an international economic power center, the economy has the chance to attract a new wave of high-quality and green FDI from European investors who are looking for a safe and competitive investment destination.

Cany underlined: “Considering that BCI respondents have expressed profound enthusiasm in Vietnam as a green growth investment destination, there is no better time than now to accelerate sustainable development in Vietnam."

Source: BCI Quarter 1, 2022

For the first time, the BCI also tracked attitudes toward Vietnam’s perspective on green growth. More than 82% of respondents indicated a positive outlook regarding the potential for the country’s green and sustainable development, reflecting widespread eagerness toward Vietnam’s green future.

To achieve this, green development will be the main theme of EuroCham’s 2022 activities, with a year-long schedule of green events leading up to the Green Economy Forum and Exhibition (GEFE) 2022.

GEFE 2022 will be a platform for collaboration, discussion, and investment coordination organized and joined by business stakeholders and government authorities from Europe and Vietnam, all for the sake of aiding in Vietnam’s journey to meet its COP26 commitments.

The BCI is a regular barometer of more than 1,200 European business leaders and investors in all sectors of Vietnam’s economy. It provides quarterly updates on their perceptions of Vietnam’s trade and investment environment as well as makes projections for their own respective companies. 

This research was first conducted in 2013 and has been carried out by YouGov Vietnam since 2020.